Free Software Matters:
Property, 3s; Barbed Wire, 8s

So we've all been talking about Microsoft again lately. Except this time
they're the victim. Whoever broke into Microsoft's internal network (taking
advantage once again of the ludicrous Microsoft email clients that allow
execution of code contained in incoming mail) has certainly generated a great
deal of sympathy for Microsoft and good deal of worry about everyone else's
security.

But the deepest significance of the Microsoft break-in, it seems to me,
hasn't been mentioned anywhere. The goal of the crackers, we are told, was
the six weeks they spent reviewing the source code of a future Microsoft
product. Would you like to review the source code of future free software
products? Be our guest. Read the code all you like. Better yet, get
involved.

Nothing could more simply demonstrate the harm done by exclusionary
property concepts in the creation of software. Microsoft, or any other
proprietary manufacturer, is forced to enormous efforts in order to maintain
its ``property,'' which means essentially its power to exclude others from the
opportunity to understand, repair, enhance and redistribute its software.
These efforts reduce the quality of the software, because Microsoft can only
afford to employ a very small number of developers and testers relative to the
enormous number of users from whose potential technical contributions it can
never derive any benefit under propertarian arrangements. But in addition to
reducing quality, measures for comprehensive property protection drive up
cost. In addition to all the physical and technical security intended to keep
the source code of its software secret, Microsoft must also devote substantial
expensive effort to complex nondisclosure agreements, licensing arrangements,
enforcement actions, and so forth. In the end, eight shillings of barbed wire
protects three shillings of property.

Microsoft, of course, would say that its property is far more valuable than
the barbed wire used to protect it. ``Just look at how profitable we are, and
how high our stock price is.'' Leaving aside the minor question whether this
state of affairs arises from illegal business practices, we should remember
that all this apparent value rests on guesswork. Consumers guess that they
will not be able to operate free software with their existing skills, and so
will be unable to make a transition away from Microsoft products without undue
suffering. Securities analysts and investors therefore guess that free
software is not very important to Microsoft's profitability. The stock price
thus remains somewhat high.

But the fact is that consumers can now get at very low cost (or absolutely
free if they want to do a little more work) higher-quality, more reliable
software that will allow them to be immediately productive with very small
adjustments to their existing skill set. A PC equipped with the Linux kernel,
GNU, XFree86, Helix GNOME, Star Office, and other free software tools presents
an environment in which a Windows power user can be perfectly productive, and
which she will soon begin to use in very sophisticated ways that Windows would
make difficult or impossible. The convergence of end-user skill sets from
Windows to free software will only continue, making migration easier. Under
the system of commercial competition that all capitalists say they favor,
Microsoft now has to compete freely against a better product which is sold
everywhere at its marginal cost, and is thus also available on the net for
free. Its zero marginal cost comes not only from its digital substance, which
can be copied and transported at no cost, but also because it isn't the
subject of exclusionary property rights. In the very low friction world of
the net, in other words, the cost of barbed wire actually makes the difference
between competing successfully and going under. At some point even Microsoft
finds that the cost of protecting Windows begins to exceed the value of the
franchise.

And we have been talking about the largest software company in the world,
with an existing legal monopoly over its own nearly ubiquitous source code, a
possibly illegal sales monopoly generated by its own market behavior, and a
very strong barrier to competition arising from the enormous user base afraid
of the psychological cost of migrating to a competing user environment. If an
organization with all that combined power can't resist the superiority of the
propertyless free software competitor, how will anybody else?

There are economic niches where free software doesn't have an inherent
competitive advantage. These niches aren't negligible by any means, but they
do not include the broad range of software that individuals use or that
enterprises employ to create all the basic phenomena of e-commerce and
e-management. The profound majority of what is currently thought of as ``the
software industry'' is about to become something we will think of as ``the
free software revolution.'' When the process is over, maybe we'll look back
at the Great Microsoft Break-In of 2000 as the moment when people began
realizing that barbed wire simply costs too much.

*Eben
Moglen is professor of law and legal history at Columbia University Law
School. He serves without fee as General Counsel of the Free Software
Foundation. You can read more of his writing at moglen.law.columbia.edu